How Technology is Enabling Institutional ESG? | European Blockchain Convention

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So actually, Joe, you stole my first question. So who here in this room doesn't know what ESG means? So raise the hand if you do not know the meaning of ESG. Be brave. Okay, a few hands raised. Yeah, ESG, SDGs, two different acronyms, but still a little bit of different meanings. So ESG stands for environment, social, and governance, and it's a set of standards measuring a business impact on society, environment, and all transparent and accountability. To discuss this topic, I will be discussing with Gabriel, who is, let's say, the referee here. He's a general counsel and joined Hive in 2021 as the director of legal affairs, further to the acquisition of GPU Atlantic's data center site in New Brunswick, Canada. And he has extensive experience in the field of cryptocurrency mining, data center operations and management. So welcome on stage, Gabriel. Then we have Max Ament Ament, the serial entrepreneur. We have— you have actually 5 times funded an enterprise in SaaS, fintech, Web3, and climate, and you all exited them. You're also an angel investor in more than 100 companies, and you have a recent focus on refi with a small vehicle called Ethos. If I'm correct, for launching a larger venture fund. Then we have Dr. Andrés Ruiz Vargas, who are— or who you are, our meditation expert. He supervises research projects at Kolos with focus on discrete choice models, tokenomics, and smart contracts. He has a proven research track and industrial experience in financial applications. His love for nature and mountaineering give him a genuine interest in climate-friendly technology. Technologies. And last but not least, Dana, who is the girl power here on the panel. She is the CEO of Flow Carbon, which she co-founded in 2021 with the goal of scaling natural climate solutions to preserve the Earth's natural carbon sinks. She is involved in several key carbon markets policy working groups addressing the incorporation of new technology into the market. So to go back to the ESG meaning, I think it's quite interesting to know as well that ESG investing consists of investing in companies or funds based on how well they perform on environmental, social, and corporate governance measures. It has grown quite a lot lately in popularity, especially due to the climate change and the regulatory scrutiny. A report from PricewaterhouseCoopers published in October 2022 states that ESG-focused institutions International investment will be seen soaring to 84% to reach approximately $34 trillion in 2026, making up 21.5% of the total global assets under management. So definitely a topic that is building up, and let's deep dive into the topic now. So a question for all of you, who wants to speak first is up to you. We'd say that today it's quite normal to associate Blockchain as a mean to help with ESG. So what are the strengths that make it the technology to use for ESG? Maex Ament.

Sure, I'm happy to start. I mean, I'm not sure it's the technology. It's one ingredient. Yes, probably one of the more important ones, I think, to solve our climate crisis. If we just look a few weeks back when we had the Guardian article about the quality of carbon credits, where, yeah, I think 90% or 95% of those carbon credits were bullshit. And well, is there a technology that actually has like as one of the labels written on transparency? Yeah, it's kind of a blockchain. So that's just one element why a blockchain makes sense and I can go on and on to see the quality of a carbon credit, to see actually where it results from, where it comes from in detailed level. And I think that is just one of the areas that we focus on. But there's others. I mean, as we know, Web3 provides means of better resource allocation, better funding. That's what we did for the last few years in DeFi and now applying that to our climate crisis. Those DeFi, decentralized finance tools to this new ReFi world sounds natural and feels natural and mandatory.

So we're coming from a little bit of a different angle and to go into the angle that we're coming from, I'll just touch on a little bit about what we're doing at Hive. So Hive is a green-focused data center builder and operator. We're a publicly listed company, and we listed in 2017. And since inception in 2017, we've had an ESG focus. So with that in mind, what we are doing is we are mining digital assets, primarily Bitcoin, and we're doing that in cold climates with resources that are sustainable. So hydroelectric, geothermal power that is either surplus or stranded. And those, you know, surplus and stranded, those are keywords, and I'll touch on them a little bit later. So what are we contributing with blockchain technology towards ESG? There's quite a few things, but two of them to start off with is we're providing demand response and grid balancing essentially as a service to municipalities, and we are also enabling them to monetize a resource which is right now underutilized. So that's where the key of stranded comes in. So we are seeking out power that is, for example, one of our data centers is in the north of Sweden. So that power is not going anywhere. There is no infrastructure to send that to Stockholm, to send it to neighboring countries. It is stuck up in the north of Sweden. The local consumption, or the demand, the base load, is actually quite low during most of the day, and then it will peak in the morning and in the afternoon when people get home from work. So basically what the grid needs to do, and this is happening all over the world where there's— where everywhere, everywhere there are grids and everywhere people are dealing with the same problem, is how do we respond to peak demand? And even if you have renewable sources, usually the response to peak demand involves non-renewable generation because you need to be quick. You need to be able to respond to demand as fast as possible. And usually there is a lot of management and, and time to be able to take that hydropower, take that renewable power and get it up to where the peak is at just to bring it back down. So we come in and we take the base load. So basically what this local community is using, and we raise that. So we come in, we'll use enough power so that during these periods of peak demand, they don't need to kick up nonrenewable sources to make more power to go around. We're plugged in together and it redirects the power from us into the community. So that saves them money. And on top of just saving them money, we're monetizing all that power that would otherwise just be wasted. And what that means is the grid is essentially balancing the generation to the demand. So if you're working and if you're plugged into a dam, they're just flowing water around the dam. So that is a resource that, that has potential to be monetized that isn't being monetized. So we come in and we do that. We monetize that power, and that has consequences that are very positive, like the utility will have a healthy balance sheet. And with that healthy balance sheet, they reinvest in their infrastructure and ideally in new renewable generation.

Thanks, Gabriel. We will go back to that at a later stage. But Dana, what is your point of view on the blockchain as the technology for ESG?

Yeah, thank you. So I, first of all, I'm gonna be loud because I've been in this room earlier and I know that, uh, you need to be loud for everyone to hear. So I very much agree with where both of my colleagues took the question, which is to offer a very specific example. So to say that blockchain is the technology to solve ESG is a very, I think, way too broad thing to say. And I know it's just a prompt. I think the key is to find very specific use cases where blockchain is solving a real problem and is the right solution to that problem. And so where Flow Carbon is active is, like Maex Ament, in the carbon markets. So the carbon markets, for those of you who don't know, I'll take a minute to explain what this market is. The carbon markets, especially the voluntary carbon market, is essentially the only market-based mechanism for funneling private capital into essential projects that have the effect of removing carbon from the atmosphere but are not financially viable. That's a, a gross oversimplification if I have any carbon markets experts in the room, and I know that, but that is essentially what the carbon markets are. So there are projects like nature-based projects, conservation, reforestation, wetlands restoration, and all kinds of other projects, renewable energy projects, technology-based removals, carbon capture, direct air capture, that remove carbon from the atmosphere or prevent emissions that would otherwise happen. They're not financially viable. And so these projects can be certified through globally recognized carbon credit certifiers or issuers. They can be certified, and their carbon impacts can be quantified, and they receive credits in that exact amount. And those credits then need to be sold into a market in order for them to recover the revenue needed to make their project financially viable. So this is phenomenally innovative and essential because these projects are otherwise not financially viable. It is not financially viable to do large-scale forest conservation, for example, which is why we see most of our forests being destroyed at astounding rates, which we all know. Ecosystem destruction, major problem, both from a climate standpoint, wildlife, water systems, food systems, etc. And so the carbon market, essential mechanism. When we at Flow Carbon looked at this market when we started the company 2 years ago, we saw that the fundamental infrastructure for this market was nascent at best, highly inefficient. So how did these carbon credits get created? Through very manual processes of data collection, aggregation, third-party auditing of the data from the project. What is the carbon impact of this project? It's an amalgamation of data that's happening right now on PDFs and emails and all kinds of inefficient processes. The carbon credit is then created on the back of this really inefficient, non-transparent data. And then the credit trades or is sold through, again, through non-standardized contracts in an OTC market. So blockchain infrastructure is really, really great for solving the problems that exist in this kind of market ecosystem, which is illiquidity, lack of transparency about the asset, which is a digital asset created as a result of data, illiquidity, lack of price transparency, lack of transparency about the provenance of a credit, um, and then, uh, lack of access. So accessing these things right now is done all through intermediaries who often take like a 30% cut. So, uh, in response to your question, I think it's essential to find real use cases, in this case in an off-chain market, that is essential from an ESG standpoint, a climate standpoint. but has been prevented from scaling and achieving its potential, and is also riddled with a bunch of transparency, uh, questions that stem directly from the credibility of the data used to create the unit, the carbon credit. Um, so you identify that challenge, and then it turns out blockchain is a really, really great solution. So at Flow Carbon, we're tokenizing the carbon credits themselves, um, doing a lot of work in the pre-issuance process as well around the data used to certify them. And I can talk a lot more about that.

Thanks, Andres. Actually, that brings me to this question. We're seeing and we're hearing that blockchain can be more used as a catalyst, more than just the technology. You know, there are plenty of them. This catalyst, how do you see it for the reduction of CO2 emissions? And how does it fit with this goal of reducing the emissions?

I think that blockchain comes with the idea of trust. With decentralization, there is this implicit thing that if it's on the blockchain, we can trust it. And compared to— even though, for example, last year there were plenty of stories that would make you think we shouldn't trust it, still people are believing in it. And I think if we bring it, like Dana said, to specific examples to try to solve a problem, We can bring that trust with it, but kind of we need to be careful to do it properly because else it's just like FTX or Luna. So on our concrete example, what Codos is trying to do after we— I mean, first came Bitcoin, then came Ethereum, and then smart contracts and dApps and DEXs and everything. We were thinking, how do we get to the next step? So there came move-to-earn, which some technology where people are being rewarded for moving, for doing something that is positive for themselves. What we want to do is something called Save to Earn, or proof of sustainability. We want to create an economy, a token that will reward people for doing something sustainable. And what we are tackling is actually commuting. And people might think, okay, commuting is just such a small thing, but actually 5% of global CO2 emissions are just from the act of commuting by car to work. So we would reward people by checking how much CO2 they avoid by taking a sustainable mode of transportation, as a bike, a train, a bus. And with that, incentivize people to— I mean, first of all, reward the people that are already acting sustainable, and at the same time, try to nudge people to change their behavior. And also with blockchain comes a lot of education somehow. A lot of people are interested. What is this blockchain? So you can leverage that to get people to the idea of environment. And as opposed to right now, a lot of people have the idea, okay, blockchain is bad for the environment because we have Bitcoin. And that's great when there are projects like what Gabriel is doing or what Dana is doing, what Max are doing, that are all trying to clean up somehow the perceived idea of some people about blockchain.

You mentioned the trust and the press that we hear quite often. Every day there is a new scandal or new article trying to punish blockchain. And Gabriel, I would like to know your view on the fact that energy consumption of the mining activities has been highly relayed in the press these coming months, years. The European Commission tried to ban the use of blockchain. So I would like to know whether you suffered from this bad press and whether you think the adoption process is actually blocked by this, or is it something that you do not see at the moment?

So there's, there's no shortage of bad press. There's, there's a lot of bad press and it's based on misunderstanding in my view. So before I go into the bad press, I'm gonna start with some of the good press. And the good press comes out when you go to the source, when you go to the local media that is close around the data centers that we're operating. So we have data centers in Sweden, in Iceland, and in Canada. And once you get into the local paper, you'll see the good stories. They are there, they exist. So in Sweden, we're the primary sponsor of the Boden hockey team. Our name is on the arena, our name is on the jerseys. We are part of the community. Kids in that community go to hockey games for free because we want to encourage youth to participate in activities and social life in Bowdoin. We don't want them to go home bored after school. We want them to be part of the community. So there's phenomenal things that we're doing socially in the communities where we're operating, and then there's also things that we're doing that benefit, for example, CO2 reduction. So I'll talk about just quickly two projects. One project in Quebec that is already fully built out. We're taking the heat from our data center in Lachute, Quebec, and that is basically coming out of our data center, going across the street, and it is fully heating a 200,000-square-foot facility that is the biggest jacuzzi and swimming pool manufacturer in Canada. So we are heating them with the heat coming out of our data center. And just to be clear, when you're a data center that is operating on renewable power, your byproducts are really two things: value, Bitcoin, and heat. So you have this heat that you could either not capitalize on or capitalize and find good things to do with it. So we're finding these projects. So in Quebec, we're heating this, this swimming pool manufacturer. In Sweden, we're working on a project right now. Last year we signed an LOI. It's in development, and we hope that it's going to be built this spring. It's a project with a public company that is farming as a service. So they're going to be putting up a greenhouse, and in the north of Sweden, they're going to be growing tomatoes, cucumbers. They're even going to have potentially a fish farm for the local community. That cuts emissions. First of all, we're reusing our heat, we're recapturing our heat, we're putting it to good use. But also, there is no more— sorry to mention Spain, but they're not going to be shipping cucumbers from Spain. It's going to be local. It's going to be in that community, grown in that community, and sold to that community. So these are the types of projects that we're involved in. Once we get really close to the source, we'll read about it. What's happening with the bad press is really the bad press happens as you get further and further away from the communities. And it's at higher levels of government and generally the population, especially in Europe, that think that consuming power is a bad thing. It's not a bad thing when there's a renewable source and when you're providing good to the community and monetizing basically a, you know, water flowing through a turbine. So whether or not we're in full operation or we power down during demand response, there is no CO2 difference. So essentially, we are seeing a misunderstanding in the general population about two things. One, they might think that because we are using power, and a lot of it, that we're driving up the price. Well, I mentioned earlier that the power that we're using is stranded. So if you're in Stockholm complaining about the price of power, it has nothing to do with us. That power is not getting to you. There isn't the infrastructure or the transmission to bring it to the rest of Europe or other parts of the country that might need it. So there is no impact on the price for the consumer. On the contrary, the local, the local population actually avoid price increases because the utility is now healthy, because we're monetizing power more than it has ever been monetized for them in less, you know, maybe 10, 15 years ago they had a big industry, industry which has since moved away and now we're reinvigorating that community.

Okay, Maex Ament, I would like to have your view on why the carbon emission— I think 3 of you are actually dealing with this— why it can be considered as a fertile ground for the use of this technology.

Well, let's start with the fact because build on what Dana just said. There's existing carbon markets out there. They're extremely inefficient, pretty new, built on pretty much email, fax machines, I guess, OTC. So, um, and so it's our— it's, it's a possibility actually to build those markets, um, from the creation of the carbon credits to the trading, to the retirement on the right technology. And why should we do that? Well, let me start with something else that we probably talked about here, decentralized finance. So for the last 5 years with my company Centrifuge, we try to move and still do to move the financial system on-chain. Decentralized finance, right? And we all here, I guess, hope, big believers that this will happen. It might take a while though. Why is that? Well, because the banking system, not the technical one, but the banking industry or system around us is for decades hundreds of years or thousands of years, depending how you think when it was invented, is around. We have like 2 billion bank accounts, so it will take some time to move this system on-chain. I'm still a believer, but unfortunately, let's work harder and wait a little bit. It's slightly different in the carbon markets. It's equally fucked up, equally inefficient, but well, pretty new industry and not as many companies involved, technology involved, and people involved. So we can actually build the whole thing again from the financing of carbon credits to the monitoring of carbon to eventually trading and the retirement on the right technology stack. And this is clearly a decentralized one on the blockchain.

And when you meet with actors from the sector, are they believers? Do you have to convince them? I think it's a question for Dana and you, Maex Ament, because you have the experience Yeah, it's a great question.

So this is an existing off-chain market, and at Flow Carbon, we are essentially writing the blueprint for how you do advocacy and engagement to an off-chain market to move them on-chain. And what's happening right now in the carbon markets, I think is— not I think, I know— is completely unprecedented and is even blowing, I think, all of us away. So what is happening? You have 3 of the 4 main carbon credit issuing agencies— there's 4 main ones— 3 of them, the 3 largest ones, have launched in 2022, second half of 2022, they launched public official consultations to evaluate and assess what a framework looks like for bringing on-chain the assets that they issue, the carbon credits themselves. So these are off-chain semi-regulatory bodies in a lot of ways whom Flow Carbon engages with very, very actively. Who have understood and realized and recognized the benefit that a blockchain-based market ecosystem brings to their market. And so they have officially launched consultations to evaluate and assess and create these frameworks, and each one is ongoing right now. The World Economic Forum has created an entire working group that we're very active in as well, devoted to writing the rules and the blueprints for moving the carbon markets on-chain. So a lot of the off-chain governing institutions in the carbon markets have worked with Flow Carbon and with others over the last 12, 18 months to do this together and collaboratively, because this is an off-chain market and we are making the case and explaining and running through the various scenarios with them around what it looks like to have the unit that's at the core of their market, a carbon credit, moved on-chain. Now, just for clarity's sake, what does that mean, by the way? A useful analogy you can think of is Circle. So at Flow Carbon, it's not an exact analogy, but at Flow Carbon, we would take custody of these carbon credits, or we would come up with mechanisms for doing— not come up, we have mechanisms for doing that. And then a token is minted, which represents each individual carbon credit. So that's what we're talking about. It's an off-chain asset. It's locked in registries that people can't access. None of you can buy a carbon credit right now if you tried. Neither can I. Flow Carbon can and does. And we then mint tokens which are much more accessible and have price transparency associated with them, can be grouped together into bundles to create more liquidity and fungibility, et cetera. But I think the stakeholder engagement piece is fundamental and comes first, which is engaging with the off-chain market.

And what about the education part? I think in all the blockchain, we need quite a lot of education, which is a little bit different from when we had the internet. Everybody was using it without even questioning it. Here, blockchain, it seems like everybody wants to be the master of the technology, wants to understand every single nitty-gritty details. Do you think it's needed? What do you think we are missing in the education part related to the use of the technology in most of the use cases that you are facing?

I think going back to what Max was saying, it's not just that the banks have been there for so long, it's that also blockchain has been here for very little. And if you— I don't know how to use a DeFi. I think the idea is super cool. I would like to do it because I don't want to rely on my current exchange broker because they might be FTX next. But I don't know where to start with DeFi because I haven't just looked into that. I'm interested in other things as well. So I think there is a part where the technology needs to evolve more, and the more it evolves, the easier it will be for people to adopt it and to play with it. And I was wondering if I can ask a question also for what Dana was saying, because actually for this whole carbon credit thing, I'm very excited about it because I had to fly here, for example. For my work, so I can't really avoid it. I would like to offset that, so I look around and see, okay, where can I buy carbon credits that I can feel good that when I fly here, my carbon is offset properly? And my question there is, how is— how are you guys that are actually working on that looking at making that transition that there is legitimization in the carbon offset market?

So legitimization comes from the integrity of the data used to create a carbon credit, and that's fundamental. And I think there's a lot of really innovative work happening market-wide, and in particular, technology that's being built and being built on blockchain where you aggregate the data from projects and you store it on-chain or you make it accessible on-chain. and it can be vetted and monitored. And there's ongoing, uh, the data that comes in, it's often through meters or remote sensors or drones that are looking at tree cover. There's all kinds of data that comes into assessing a project, and that can all be made available transparently on-chain. And, um, you can then track the data that was used to create a carbon credit. And I think that's fundamental, and that's going to transform the market. Um, in terms of your specific question, and I'm going to keep this short, but that's such a good question. You, you flew here and you wanted to offset your emissions, which is amazing. Good for you, kudos to you. Um, you can't buy a carbon credit right now. What you can do is you can find a website that says, you know, tell us the flight that you took and we will calculate your emissions and offset it for you. You have no idea what's happening. Um, at best what's happening is they are tabulating something behind the scenes on a spreadsheet, and then they're going into their registry account where these carbon credits are held. Like, you know, Flow Carbon has multiple of them. Each registry— each of the carbon credit issuers has their own registry. Anybody who wants to custody these things has to have a registry account. So we have multiple accounts And we, if it's us or whoever it is, tabulating, going in and retiring a credit, and then presenting you a PDF. Is there opportunity in what I just described for like all kinds of things to not happen, happen wrong, not happen at all, triple count, quadruple? Yeah, like that's the most inefficient, non-transparent, and like process that relies on trust but is not vettable that I can imagine, and so What is a token? A token is a composable line of code. In many ways, it's— the composability is essential here. Imagine if you had tokenized carbon credits that you could plug into applications. Flow Carbon has partnerships with over, I think, 30, maybe we're at 40 protocols that are building on top of a carbon-backed token. They're plugging it into their protocols for automatic offsetting. That's completely, um, that's completely trustless. It happens automatically, um, on the blockchain. So Not to mention a carbon-backed token can be bought by you individually. So two solves for that. Max?

Maybe just one quick one. I think your question was on the education side of the house, how we get more people to educate it. I think we're winning when nobody realizes that there's a blockchain in the back end. Institutional investor will not download fucking MetaMask and store his carbon or whatever tokens in there. They just want to do something which they do today. Simple, easy, maybe with an API, maybe with a front end. And the backend will be efficient, the backend will be a blockchain, the backend will be decentralized, but the frontend will be pristine, nice, easy UI. I mean, that's what we did in finance for the last 15 years in fintech. We put lipstick on the pig, right? It was on the old banking system. Now we're ripping out with DeFi the banking system and put the two things together. And I think in the carbon market, the same will happen, just faster.

That brings me to a question. Yes.

I just wanted to add there, I completely agree with what Max is saying, because what we need is ways where we can go into the blockchain without actually realizing it. And that's what part of what Codos is doing. The idea is that we have an app, there is not really anything you have to do to use it. You just go there, you put your password, and that's it.

It brings me to one of the questions I had when I looked into your projects, and we mentioned especially when you want to offset when you Fly and so on. I've looked before to these solutions and I was like, am I sure that the money I will pay for my flights are actually going to the carbon credits registries or so? And that brings me to the question, is the ecosystem around your solutions, or are they ready? Do we need to see more actors? Are there opportunities to bring, uh, same for your network with Kudos? Are we seeing an interest to build an ecosystem around your solutions? Tough one, no one wants.

So I think, for example, what Kodos is trying to do, we are not there yet with the production-ready app. We hope to launch sometime later this year or beginning of next year, but we are almost there, and the idea would be that you can really just download the app and there is no big hurdle to get into it.

We're not there yet. It's early in what we call regenerative finance, refi, which means opportunity as well. That's why actually we are raising right now a fund that's dedicated on doing exactly that, investing in those early-stage projects because, yeah, there is still stuff to build and things to be done.

So if anybody has an idea to join an ecosystem or to develop it around these solutions, I think you have the name of the speakers. They would be happy to discuss that. To go back to the regulation, I think from one of our previous exchanges, Dana, you mentioned that there are more and more working groups, more and more regulators, authorities that are willing to publish on the topic. And that brings me to the question as to why there is a keen interest now to understand maybe promote the use of the technology? Are they finally aware that it's not working as it is? Are they willing to improve things? How do you explain this?

Yes, I think most people who look at the carbon markets that we're describing, the voluntary carbon markets, recognize that it's in dramatic need of improvement along a number of points and access points, and that blockchain is a very, very effective technology for addressing specifically the pain points that this market has experienced. To revert back to your earlier question about how— whether our ecosystems are ready for engagement, I'll point to something that Flowcarbon did with Centrifuge, which is as follows. There's a keen interest in investment capital moving into these projects. So these are projects happening all over the world that have tremendous carbon impact. And they need early-stage project finance, but are very, very difficult to invest into because how do you underwrite this? How do you do the risk assessment? There's no benchmark pricing for the ultimate credit that is created because that market is totally illiquid and non-transparent. So investing is really hard, even though there's a tremendous amount of capital that recognizes the ESG wave, recognizes that climate finance is essential for meeting all sorts of climate goals. So major economic opportunity. And very essential from an impact standpoint. And so what we did was design a centrifuge pool where we took forward contracts from carbon projects— so this is forward finance for credits that haven't yet been issued— and put it into a centrifuge pool and basically tronched the, uh, the risk. We had senior and, and junior debt and enabled investors to come in, and we're expanding that as well. And so we're using an on-chain platform, a phenomenal one. Thank you. Exactly right. Hey, Centrifuge. To basically expand this and enable investors to access these projects in a structured, diversified product that makes sense for them with tranches depending on how they want to engage. So that's something that can be done right now, but also demonstrates that market-wide in the off-chain market, there's a ton of interest from investors, from— you said regulators, it's more like these semi-regulatory bodies, from a lot of think tanks, from government. The CFTC has, has been looking at the carbon markets and has focused on blockchain as a potential key solution there. So there's a lot of interest in this market and an understanding that the market is improving, and that has led to a lot of investor interest. And so we created a solution together that they can access. Yes, Andrew Hughes.

And in this optic, do you believe that we need tougher regulation? I know that in Luxembourg, for example, at the CSSF level, they are obliging some financial institutions to look into the ESG report on it. Do you think there is a need for tougher regulation for people to actually take this issue into reality, into account? Or do you think that we should let the flow as it is right now?

Maybe I could touch on this. The— with— I'm usually against tough regulations, especially in blockchain, where government is slow to understand what is going on and proceed on things, you know, on a gut instinct. Without industry consultation. So generally, I'm against any regulation without industry consultation and collaboration, especially in a young and blossoming industry where, where a government will risk essentially driving out the young companies, the startups, and all the brains who are, who are working on this type of technology within the country. So I think rather than the tough regulations, it should be focused on incentives. So incentivize the good actors to do good things and to be more focused on ESG, on compliance, on everything that they're doing good. Reward the good. And I think that is how you're going to improve kind of the industry while still having a say in how it grows. Because if you drive everyone out, you're out of the ballgame.

Okay, final roundtable. Let's ask a question. How do you see ESG and blockchain going in the next 5 to 10 years? What will be the extension? Will it be only on carbon credit emissions? Will it be extended to some other topics that are also crucial for life? So maybe Maex Ament will want to—

Sure. I mean, first of all, let's start again with the carbon markets. They're quite important, I think. They will grow in the next 5 or 7 years 50x in volume. So that's quite substantial growth. Other areas are like the circular economy where I think blockchains or decentralization incentive mechanisms built into tokens will play a substantial role. I'm believing as well that biodiversity is a topic that is just being discussed and built up right now and again will be from the ground up built on a right infrastructure, on a decentralized stack. Either as contributors to carbon credits, enhancing the quality with that, or as a standalone offsetting mechanism. I don't know yet, but there's a lot happening there on just those three areas that we look at.

I mean, I think even on the digital asset mining side, I mean, like I said before, if you're doing it with renewable power, the byproduct is value that you're getting back in Bitcoin and heat. So if you're doing it sustainably, I think that there's going to be much more use of literally mining within university campuses, hockey stadiums, and we're being approached with these projects. You know, new developers in industrial parks are asking us to play a role in reducing their energy bill. And I mean, there are tons of greenhouses that have integrated this technology because power is expensive, they need to heat, and they want to get a kickback from Bitcoin that lowers their costs and enables them to keep doing what they're doing. So I think that there's there's going to be more integration of literally blockchain ASIC mining within institutions. We've been approached and we're in discussion to do this in a hockey arena where there are two arenas and one of them has a dome roof and they're spending hundreds of thousands of dollars a year heating an arena and the air is just escaping. So basically the proposal is we come in, we do it. It's win-win. They save $300,000 a year and we make money. We're using renewable surplus energy. It's a really interesting proposition. So I think more and more of these projects might come up. I've been seeing some come up with using some very small hydro projects throughout Africa. So I think in 5 years on that side, we'll see projects that just make sense on every side of utilities and consumers.

Dana, what's your projection for the future?

Um, I think that there's a number of environmental commodities markets, carbon credits being a very big and visible one, but there's a bunch of other kinds of credits. It could be biodiversity credits, but there's a lot of other kinds of credits and other environmental commodities that trade as certificates that are highly inefficient and are experiencing rapid growth both because of the onset of ESG and because they're increasingly needed by corporations. Corporates need to buy them. And I think all of these markets are really interesting to look at for blockchain infrastructure. The carbon markets are first, but certainly not the only ones. And so I would think that in 5 to 10 years, you see really, really robust markets that are much more transparent and liquid for a lot of these assets on-chain.

And Andres, I see a big screen saying time's up here, but, uh, well, first of all, I joined Kodos because I'm excited to see, uh, people using it and then having a platform where people can really be incentivized for making sustainable decisions. I don't think we're gonna be the last one producing something like that, so I'm really excited to see how that develops and also what competitors we will have in the future.

Well, thank you very much for your insights. Good luck for the future, and I look forward to see what you come up with in the next 5 years. I will encourage everybody to discuss with you because your projects are amazing and important for the future. So thank you very much.

Thank you. Thank you.